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Mobile Media Spending To Hit $55B In 2012

Fueled by new technologies and
rapid device adoption, total U.S. spending on mobile media is expected to grow 30% this year to $55 billion, according to a new forecast presented Thursday at MediaPost’s Mobile Insider
Summit.

That estimate from market research firm PQ Media combines mobile revenue generated both from providing content and access and marketing and advertising. The former includes spending on
mobile data services and content delivered exclusively to mobile devices. The latter spans everything from banner ads, in-game ads and mobile search to mobile coupons, e-mail marketing and 2D
codes.

To date, mobile access and content is the larger market, estimated at $39 billion in 2011 compared to $3.4 billion for mobile advertising and marketing. Of that $3.4 billion,
advertising -- display ads, search, and video ads, for example -- amounts to $1.8 billion, slightly more than the $1.6 billion devoted to mobile marketing formats like coupons, apps, and sponsored
Tweets.

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Starting from a smaller base, mobile marketing and advertising has grown about twice as rapidly as content and access spending: 53.7% to 27.8% from 2010 to 2011. That pattern will
continue this year, with marketing/advertising spiking 49.5% versus 28.3% on the content/access side, according to the PQ Media study, which also covered social media spending.

The firm
estimated total U.S. mobile and social revenue at $45.4 billion in 2011 -- up 30.2%, with combined spending in the two areas expected to account for 10% of all communications revenue ($1.4 trillion)
by 2016. Mobile media alone is projected to reach the $100 billion mark by 2015.

In his presentation, PQ Media CEO Patrick Quinn noted that mobile media is the fastest media to hit $1 billion
-- it has taken five years, compared to 16 for the Internet.

Looking more closely at mobile ad spending in 2011, the study showed that streaming video, search and in-game ads made up the bulk
(68%) of spending. Dollars going to in-game advertising have ramped up especially fast, more than doubling last year.

On the marketing side, SMS-based contests accounted for nearly half
(48%) of spending, with marketing apps the next-biggest format, at 17%. Location-based services, mobile coupons, apps and click-to-call marketing are among the fastest- growing areas.

Quinn
noted that smartphone penetration, now about 35% to 40% in the U.S., will be a key factor driving growth in the next five years.

During that time, the 60%/40% split between business and
consumer smartphone users will be reversed as the devices spread to a broader audience. Rising adoption of tablets, the buildout of 4G networks, and increasing time spent with all mobile devices will
also be among the main growth drivers in the coming years.

Even so, familiar obstacles remain in mobile growth. Those include saturation in the feature phone market, high access fees slowing
smartphone growth and device and network fragmentation that continue to make it more difficult to buy mobile advertising and marketing.

“The biggest challenge here is that there
are 100 competing advertising and marketing platforms, including 17 just in mobile,” said Quinn. That overwhelming array of options leaves “a lot of marketers confused and
flustered.”

He added that tech-centric media and ad executives on both coasts forget that most American consumers don’t have homes filled with the latest gadgets, suggesting that
expectations for mainstream adoption should be tempered.